Will ASX copper shares keep surging from here? (Plus: 2 top picks for exposure)

Can copper stocks continue their electric returns?

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ASX copper shares have risen strongly over the last few months. For example, since the start of 2024, the Sandfire Resources Ltd (ASX: SFR) share price has surged almost 30%, as can be seen below. Meanwhile, fellow ASX copper miner Aeris Resources Ltd (ASX: AIS) has seen its share price almost double in 2024 to date.

Various resources are required to decarbonise the world, including copper, lithium, nickel, cobalt, and rare earths. But arguably copper may be one of the most vital commodities on the path to a greener future because of its importance to electrification. Copper is essential for wind and solar renewable energy generation, energy storage, electricity transmission, and electric vehicles.

In fact, Rio Tinto Ltd (ASX: RIO) recently highlighted that just one 1MW wind turbine uses 3 tonnes of copper, while an electric vehicle uses four times more copper than a traditional vehicle.

Also according to Rio Tinto, global demand for copper is set to grow between 1.5% to 2.5% per year. This comes at a time when good copper deposits are becoming harder to find.

Those are the long-term dynamics, but with the copper price recently soaring to record highs of more than US$11,000 per tonne, is now the right time to invest?

Macquarie names two ASX copper shares

According to the Australian Financial Review (AFR), Macquarie is still pretty bullish on copper, despite prices recently soaring.

Macquarie's analysts increased their copper price forecast for the 2024 calendar year by 7% to US$9,671 per tonne and for the 2025 calendar year by 9% to US$9,575 per tonne. While those numbers are lower than this week's record highs, according to Statista, they would still represent stronger prices than have been seen over most of the past decade.

So why is the investment banking giant still optimistic on copper? Per AFR, Macquarie believes that slower Chinese demand for copper due to a weak property sector will be partially offset by a boost in demand outside of China.

However, Macquarie expects a copper surplus in 2026, leading to a price forecast of US$8,500 per tonne for that year.

Of the diversified miners, AFR reported Macquarie's preferred pick as South32 Ltd (ASX: S32) while from a copper pure-play perspective, the broker favours Sandfire.

More positivity on Sandfire shares

Macquarie isn't the only top broker that likes Sandfire for the longer term

AFR also reported broker Wilsons likes the ASX copper share after visiting its Botswana operations, but remains cautious about the recent strength of the copper price. Wilsons forecasts that in FY25, Sandfire can generate revenue of US$1.14 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) of US$332.5 million.

Wilsons said:

We stress that we are positively predisposed toward Sandfire (and to structurally strong copper markets over the medium/longer term), but at this stage downgrade our rating to market weight, given our view that copper prices might give up some recent gains in the near term.

Wilsons has a price target of $9.90 on Sandfire shares, suggesting possible upside of 4.1% over the current share price in the next year.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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